-
Gold price holds steady above $3,500, with gains capped by a stronger US Dollar.
-
Iran pledges retaliation after the US strikes three nuclear sites.
-
Fed’s Waller backs July rate cuts to counter rising risks to the labor market.
Gold (XAU/USD) is experiencing subdued movement above $3,350 during Monday's European session, with prices edging slightly lower despite intensifying geopolitical tensions between the United States and Iran. Tehran has vowed retaliation after the U.S. reportedly struck three nuclear facilities, aiming to curb Iran’s nuclear ambitions.
According to a Bloomberg report last week, senior U.S. officials are preparing for a potential strike on Iran, possibly as soon as the weekend, to prevent the development of nuclear warheads. During the European session, Iran’s newly appointed military chief, Major General Amir Hatami, warned that every U.S. aggression against Iran has historically been met with a “decisive response,” as reported by Fars news agency.
Typically, geopolitical unrest boosts demand for safe-haven assets like Gold. However, the yellow metal's upside is being restrained by a stronger U.S. Dollar. The U.S. Dollar Index (DXY) hit a three-week high around 99.40, making Gold more expensive for investors holding other currencies.
Adding to the pressure, U.S. bond yields inched higher, with the 10-year Treasury yield climbing to around 4.39%. Rising yields on interest-bearing assets tend to reduce the appeal of non-yielding Gold. This comes even as Federal Reserve Governor Christopher Waller signaled support for a July interest rate cut, citing concerns over labor market health. “The Fed should not wait for the job market to crash in order to cut rates,” Waller stated.
Technical Outlook
Gold remains within an Ascending Triangle formation on the daily chart, reflecting a period of volatility contraction. The pattern’s horizontal resistance lies near the April 22 high at $3,500, while the ascending trendline extends from the April 7 low of $2,957.
The 20-day Exponential Moving Average (EMA) continues to offer critical support at $3,350, helping to stabilize prices in the short term. However, the 14-day Relative Strength Index (RSI) is struggling to break above the 60.00 mark—a breakout above this level could signal renewed bullish momentum.
On the upside, a decisive break above $3,500 would push Gold into uncharted territory, with potential targets at $3,550 and $3,600.
Conversely, if Gold slips below the May 29 low of $3,245, it could face further downside pressure toward $3,200, followed by the May 15 low near $3,121.
Gold daily chart
